The m7GpppN cap is a defining feature of eukaryal messenger RNA that is required for mRNA stability and efficient translation. Our long-term goal has been to understand the mechanism of cap formation and how capping is coupled to transcription. Capping entails three enzymatic reactions: (i) the 5' triphosphate end of the pre-mRNA is hydrolyzed to a diphosphate by RNA triphosphatase (TPase); (ii) the diphosphate RNA end is capped with GMP by RNA guanylyltransferase (GTase); and (iii) the GpppN cap is methylated by RNA (guanine-N7) methyltransferase (MTase). The capping enzymes are directed to nascent mRNAs by binding to the phosphorylated carboxyl-terminal domain (CTD) of the largest subunit of RNA polymerase II (Pol II), which is composed of a tandem array of heptapeptide repeats (consensus: Y1S2P3T4S5P6S7). The inherently plastic CTD structure is sculpted by dynamic phosphorylation and dephosphorylation of the heptad serine residues. The CTD structure transmits informational cues about the state of the transcription machinery (a CTD code) that is read by CTD receptors. Our goal is to understand how CTD information content is specified and conveyed to CTD receptor proteins (especially the capping enzymes). Our genetic dissection of what is essential for fission yeast CTD function is providing new insights to the CTD code, including: (i) structure-activity relations at essential residues; (ii) the distinctive roles of position- specific phosphorylations in sexual differentiation and vegetative growth; and (iii) the ability to bypass CTD pathologies caused by S2A and S5A mutations. We've thereby demonstrated that the essential function of the Ser5-P mark in vivo is to recruit the capping enzymes. Capping enzymes also bind to the essential Pol II elongation factor Spt5, which, in conjunction with Spt4, elicits an elongation arrest at promoter-proximal sites that provides a temporal window for capping of nascent mRNAs. Fission yeast Spt5 binds to the capping enzymes via a distinctive Spt5 CTD composed of 18 repeats of a nonapeptide motif (consensus: T1P2A3W4N5S6G7S8K9). Genetic studies indicate that the CTDs of fission yeast Pol II and Spt5 play overlapping roles in recruiting the capping enzymes in vivo. This project aims to dissect the functions and structure-activity relations of the Pol II and Spt5 CTDs and the impact of CTD mutations on gene expression. We will determine structures of capping enzymes in complexes with the Pol II and Spt5 CTDs, and then assess genetically the functions of the capping enzyme-CTD interfaces. Capping enzymes discriminate different Pol II CTD phosphorylation arrays, implying that remodeling of the CTD by protein kinases and phosphatases is a means to regulate mRNA processing. Our biochemical and crystallographic studies of S. pombe Fcp1, an essential CTD phosphatase that preferentially hydrolyzes Ser2- PO4, are yielding deep insights to catalysis of CTD dephosphorylation in vitro. In this project, we propose to dissect genetically and biochemically the phosphoprotein substrate specificity of S. pombe Fcp1 and the requirements for Fcp1 function in vivo.